The bonds Dollar Linked It is a bond in pesos with different maturities in which the value is tied to the official exchange rate, used by those who want to protect their savings from a possible devaluation. These bonds have the possibility of investment in the short, medium and long term. CER bonds are adjusted by the Reference Stabilization Coefficient calculated by the Central Bank (BCRA) based on the Consumer Price Index prepared by INDEC (National Institute of Statistics and Censuses). That is, the value is updated with official inflation and has rates of return of between 2% and 10% depending on whether it is a short or long-term bond. Those that are long-term have higher rates of returns.
According to him Ministry of Economy, In September, the stock of debt under national legislation denominated in local currency increased by 3.0% ($ 200,242 million compared to the previous month) for which it will advance in the placement of debt adjustable by CER to obtain financing. The Ministry of Economy indicated that the “variation is mainly explained by an increase in the stock of Bills and Bonds adjustable by CER of $ 270,853 million (+ 5.3% compared to the previous month)”.
In the case of bonds linked to the dollar (dollar linked), Economía explained that “there is an increase in the stock of 10.9% (US $ 471 million compared to August) explained by the reopening of the bond linked to the dollar with maturity on November 30, 2022 (T2V2D) and the issuance of a new bond linked to the dollar with maturity on April 28, 2023) In this context, what the specialists say.
Federico Garay, Research Analyst at IOL Invertir Online explained: “In a pre-electoral scenario like the current one, investors tend to favor fixed-income securities with the nearest maturity to avoid market volatility. If we take the forecasts made in the last Market Expectations Survey (REM) of the BCRA to the nominal exchange rate, we find that the dollar-linked TV22 bond maturing in April 2022 has an estimated Internal Rate of Return (IRR) of 40%, which shows that the acceleration in the devaluation is already discounted in the market price“.
“If we do this exercise of calculating the estimated IRR in nominal terms with the REM’s projections with respect to the consumer price index (CPI national general level, INDEC) and the BADLAR interest rate, we find that the CER TX22 bond has a projected yield of 49% and the variable rate bond AA22 with a 48% “
He added: “Consequently, Given the current prices of bonds in pesos, it seems more attractive to favor CER bonds in the case of a conservative or moderate investor and increase exposure to variable rate bonds in the case of an aggressive investor. since, although they do not offer coverage, they have a higher expected return and the risk that the BADLAR interest rate will be reduced is very low. “
Mateo Reschini, Senior Analyst at INVIU agrees with Garay: “the debt tied to the CER has a good chance of beating the dollar linked bonds. The only exception is the possibility of a discrete jump in the exchange rate within the investment term.” At the same time, he points out that “there are arguments to think about a rise in post-election inflation” and describes: “tariff readjustments, price adjustments after the minimum prices and also accelerations in the exchange rate rise, which would make the CER trade feed back from possible movements in the exchange rate (although not as fast as dollar linked assets). Furthermore, bonds tied to inflation have the advantage of still exhibiting positive rates of return while those tied to the official dollar are already trading negatively. “
“For the moment we suggest to conservative and moderate profiles to be extremely cautious by going to short-term CER instruments and, for risk profiles (for longer holdings), we suggest that a part of the portfolio be allocated to a diversified holding of Argentine shares (for the part of the portfolio that the investor wishes to allocate to this market) “, concluded Reschini.
Finally, Tomás Ruiz Palacios of Grupo Cohen expressed: “Within the current prices of assets, strong devaluation expectations are already incorporated: for example, a dollar linked to April 2022 today pays you 7 points below the devaluation, which looks expensive” and suggested in the same sense place in CER Bonds: “We see higher value in CER bonds, which still offer positive returns. Even more so considering that the inflation data was strongly above expectations (3.5% vs 2.8% expected by the REM of the BCRA); we even estimate further acceleration for summer / fall 2022. “
“An efficient way to obtain exchange coverage is to complement an inflation-adjusted bond with a future dollar purchase from ROFEX. In this way, a dollar linked synthetic is obtained, although at much more convenient prices than those that can be obtained through the direct purchase of a dollar linked “, he concluded.
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